KOCHI: Former Chief Minister V S Achuthanandan’s stand— particularly his opposition to giving incentives to Dubai-based TECOM Investments — played a crucial role in the conceptual stages of the SmartCity Kochi project, then worth Rs 1,500 crore. Eventually, TECOM went on to hold 84% stake in the venture.
As the leader of Opposition in 2005, VS built a strong campaign against the then Chief Minister Oommen Chandy’s proposal to set up a multi-crore IT park on nearly 250 acres at Kakkanad, highlighting several clauses detrimental to the state’s interests. A major point of contention was TECOM’s demand for freehold rights over 12% of the land meant for the project.
When the LDF government headed by VS came to power in 2006, it was determined to protect public assets and held hard bargains with TECOM.
“The hard line adopted by VS, first as leader of Opposition and then as chief minister, has played a crucial role in retaining the IT field in the public sector and paving the way for its substantial growth, thus proving it a successful model,” K Chandran Pillai, former MP and national secretary of CITU, told TNIE.
“Back then, VS had to bear much criticism for taking an anti-development stand.”
In 2006, VS negotiated with the same company and changed the initial terms.
“VS said we will give land on lease but TECOM wanted it as a freeholding,” said Joseph C Mathew, who then served as the IT advisor to the CM.
“The reason was that TECOM, in the case of a lease, would only be able to sublease the land. They claimed it would turn away big names like Microsoft and Google. So, the state government said the land parcels earmarked will be given on freehold rights but will be converted into an SEZ later. That meant TECOM won’t have alienable rights. In the last year of the VS government, all misunderstandings were cleared.”
Pillai pointed out that VS put forward a new set of conditions acceptable to TECOM as well.
“We could foresee the huge potential of Kochi in the development of IT sector. We were confident of leveraging the IT sector even if the agreement reached by Oommen Chandy was discarded. Kochi has now turned into one of the best IT hubs after the implementation of Phase 1 and Phase 2,” he said.
Citing the proposal to develop Kochi as a mega AI hub, with the state government ordering the acquisition of nearly 300 acres for Phase 3 development, Pillai said: “All these have become possible because of VS’ long-term vision and his hard stand against the wrong set of initial agreements 20 years ago.”
VS laid the foundation stone for SmartCity Kochi on November 16, 2007, after clauses detrimental to the state’s interests were removed.
That decisive intervention not only ensured the land remained state property but also guaranteed the government a significant stake in the project without any considerable financial investment.
Now, SmartCity Kochi has evolved into a thriving IT ecosystem attracting global companies and generating thousands of jobs.
His foresight and refusal to compromise on fundamental principles are widely seen as instrumental in steering the project towards a path that ultimately benefited the state and its people.
Significantly, when the state government announced the cash-strapped TECOM’s decision to withdraw from the project on December 4, 2024, it was a vindication of VS’ scepticism.
“The Dubai entity is broke,” VS famously said in 2012 when reporters quizzed him about the delay in the SmartCity Kochi project.
